Cathie Wood Just Doubled Down on Nvidia (NVDA) Stock

  • Cathie Wood sold about $32 million in Tesla (TSLA) Thursday, putting the proceeds almost directly into Nvidia (NVDA) stock.
  • This investment comes as a surprise given a troubling licensing requirement announcement for chips exported to China and Russia.
  • Nvidia and Advanced Micro Devices (AMD) both sunk on the news yesterday, adding to their already hefty losses this year.
Closeup of mobile phone screen with logo lettering of nvidia corporation on computer keyboard. NVDA stock.
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As Nvidia (NASDAQ:NVDA) stock sank on Thursday, Ark Invest’s Cathie Wood took it upon herself to bolster her holdings of the chip maker — at the expense of one electric vehicle (EV) behemoth. Wood sold more than 115,000 shares of Tesla (NASDAQ:TSLA) on Thursday to buy an additional 226,000 shares of NVDA stock, worth almost $32 million.

This news may come as a surprise to investors, given the recent developments related to U.S. chip exports. So, what’s going on with Wood and Nvidia lately?

On Thursday, Nvidia announced in a filing that the U.S. government had levied a new licensing requirement “covering any exports of Nvidia’s A100 and upcoming H100 products to China, including Hong Kong, and Russia.”

This news comes as an immediate bearish signal to semiconductor stocks like Advanced Micro Devices (NASDAQ:AMD) and Nvidia, both of which maintain large trade operations with China. AMD and NVDA stock each dropped more than 5% yesterday as investors digested the discouraging trade news.

Nvidia quickly responded to the requirement news, attempting to ease concerns by offering potential workarounds. An unnamed Nvidia spokesperson informed Barron’s of the following in an email:

“We are working with our customers in China to satisfy their planned or future purchases with alternative products and may seek licenses where replacements aren’t sufficient. The only current products that the new licensing requirement applies to are A100, H100 and systems such as DGX that include them.”

It seems one investors sell sign is Wood’s buy sign, however.

NVDA Stock Makes Up Lost Ground on ARKK Investment

Cathie Wood took no time to jump on this discounted semiconductor company. Specifically, Wood bought up about 0.4% of her total fund weight with Thursday’s NVDA stock purchase. The investment was made under the flagship fund of Wood’s many exchange-traded funds (ETFs), the Ark Innovation ETF (NYSEARCA:ARKK)

Nvidia is now Wood’s 24th largest holding in the fund, with a market capitalization worth $347 billion. Despite this, Nvidia has been one of the year’s biggest losers coming off of 2021’s historic run-up.

Supply constraints paired with cooling demand for computers and graphics cards have left NVDA stock down more than 50% so far this year. For context, the S&P 500 is down only 16% year-to-date (YTD).

Last week’s tumultuous earnings call certainly didn’t help the company’s standing with investors. Nvidia reported a significant slowdown in sales and offered future guidance substantially below estimates.

Nvidia seems to continue taking hits straight to the chin. Whether the company can regain lost ground before year-end remains to be seen.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.

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